Consolidation from bottom-line perspective may play out over next few quarters: Kalpen Parekh

economictimes.indiatimes.com:

Kalpen Parekh, MD & CEO, DSP Mutual Fund, says “we felt that prices are maybe a year ahead of what they should be and part correction has happened, let us say, in the last two-three weeks, but we do feel that even today when we look at our portfolios, we would be happy with some more consolidation either in terms of time or if there is some more price fall, our conviction to buy the same set of good companies with the next five-year horizon would go up significantly. But we would still say it is time to be cautious, time to be more diversified and time to be more asset allocated rather than chasing only one bucket.”

You and your team are putting out some great data. In fact, it is just not garnering assets but also educating the ecosystem and learning which I really appreciate about your house. You called out on the froth in small and midcaps very early on. In fact, the buzz may have gotten louder in the last two weeks, but the melting of the indices started in the first or second week of February. Do you think the adjustment is done or not entirely?

Kalpen Parekh: This has been an effort for the last three years, almost 36 months where we release this document every month and you have been proactively doing a discussion around this. In fact, I do not want to take credit for calling this out. We at DSP do not want to just take this credit because we have been saying that generally valuations have been stretched in the small and midcap bucket for the last nine months or so.

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